Pele Mountain Resources Inc.
TSX VENTURE : GEM

Pele Mountain Resources Inc.

July 20, 2005 15:36 ET

Pele Mountain Reports Drill Results from Festival Diamond Project

TORONTO, ONTARIO--(CCNMatthews - July 20, 2005) - Pele Mountain Resources (TSX VENTURE:GEM) ("Pele" or the "Company") today announced results from a recent 4-hole, 485-metre drill program at its Festival Diamond Project ("Festival") near Wawa in northern Ontario. Exploration at Festival is funded by Goldcorp (TSX:G; NYSE:GG) which can earn up to a 60-percent interest in the project from Pele by funding at least $3-million in exploration expenditures over a three-year period.

Commercial size and gem quality diamonds have been recovered from previous bulk sampling at Festival within a suite of ultramafic rocks exposed in intermittent outcrop across a wide area more than five kilometres long, indicating the potential for a high-tonnage, relatively low-grade diamond deposit. The four holes were drilled within a central area of Festival's South Zone, two each at the Deutz (DH01, DH02) and Dom Perignon (DH03, DH04) diamond occurrences, to assess the thickness and continuity of diamond-bearing ultramafic mass flow units, as well as to better understand the local stratigraphy and to outline related facies that are not outcropping. Diamond extraction by caustic digestion was performed on select portions of the drill core, the results for which are displayed in the following table.



Festival Drilling Results
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Drill Depth Length Weight
Hole Sample (m) (m) (kg)
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DH01(i) 1 & 2 10.60 to 73.06 62.46 116.6
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DH01(i) 3 81.84 to 91.17 9.33 17.7
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DH02(i) 1 93.46 to 102.41 8.95 22.9
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DH02(i) 2 106.68 to 116.50 9.82 21.9
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DH03(ii) 1 0.00 to 22.68 22.68 89.1
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DH03(ii) 2 & 3 31.95 to 69.64 37.69 141.7
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DH03(ii) 4 105.21 to 108.48 3.27 7.8
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(i) Split Core (ii) Whole Core


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Sieve Size in microns (100 microns = 0.1 mm) Total
Diamonds
Drill Hole +106 +150 +212 +300 +425 +600 +850
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DH01(i) 2 0 0 1 0 0 0 3
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DH01(i) 3 4 0 0 0 0 0 7
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DH02(i) 171 58 18 2 0 0 0 249
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DH02(i) 6 3 1 1 0 0 0 11
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DH03(ii) 346 149 77 18 1 0 0 591
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DH03(ii) 378 169 63 20 4 0 1 635
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DH03(ii) 1 0 0 0 0 0 0 1
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(i) Split Core (ii) Whole Core


As reported on May 16, drilling has confirmed the subsurface continuity of diamond-bearing ultramafic rocks within the South Zone. Ultramafic flows were intersected in each of the four drill holes and ultramafic breccias/fragmentals were intersected in three of the four holes. The suite of ultramafic rocks have an apparent thickness that exceeds 60 metres and are extensive, as indicated by their intermittent outcropping over large areas.

Drill Hole DH03, the only hole from which the entire core was sampled, exhibits comparable diamond size distributions to samples collected and processed from surface outcrops and included a commercial-size diamond from its relatively small sample. Results from DH03 also suggest that the mass flow units targeted as the primary diamond host rock at Festival may be just one of several ultramafic rock types capable of hosting significant diamond concentrations.

These results are encouraging and support the pursuit of follow-up exploration work designed to address sampling variability issues and, ultimately, to demonstrate the economic potential of the property. Accordingly, Pele is now formulating plans for the collection and processing of larger samples at Festival to recover commercial size diamonds for evaluation.

Please refer to the Festival South Zone map at http://www.pelemountain.com/projects/festival/southzone.pdf for the drill hole locations.

This press release has been reviewed and approved by Dr. Edward Walker, P.Geo., an independent consultant and Qualified Person. All samples were processed for diamond extraction by caustic digestion at SGS Lakefield Research Limited, an independent ISO 17025 accredited commercial laboratory.

Pele Mountain Resources is an exploration play on the abundant mineral wealth of northern Ontario. Pele has acquired and developed a diverse portfolio of diamond, gold, and base metal properties which provide exposure and leverage both to discovery and to the increased global demand for natural resources. Pele is active on six project fronts, including diamond exploration at Festival, Alliance and Attawapiskat River with partners Goldcorp and Trigon Exploration Canada, gold and base metal exploration at Ardeen with partners Maple Minerals Corp and East-West Resource Corporation, and in-house exploration at its Highland Gold and Timmins Nickel properties. Pele stock trades on the TSX Venture Exchange under the symbol "GEM".

Some of the statements contained in this release are forward-looking statements, such as estimates and statements that describe Pele's future plans, objectives or goals, including words to the effect that Pele or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements. None of the Company's properties have any known ore body of economic or commercial value.

Common Shares Outstanding: 46,724,237

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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